According to a new report, the final amount of money that the UK’s banks could have to pay out to consumers who were mis-sold PPI, may reach £100 billion. As of March 2017, the total amount of money paid out by the banks is nearly £27 billion.
Two reasons are behind the speculation of an increased ppi claims provision. Number one is the announcement last week by the Financial Conduct Authority that the deadline for ppi claims to be made by will by August 2019 and secondly, the FCS also announcing that is has grossly underestimated the amount of payment protection policies mis-sold to customers by a massive 19 million.
Information taken from a freedom of information request has shown that the FCA’s original estimation of there being 45 million mis-sold PPI policies is incorrect and that the true amount is likely to be between 52 million and 64 million.
An article in the Guardian revealed more about the disclosure by the FCA.
The FCA said 13m genuine PPI complaints had been made so far, and banks have paid out £26.2bn in compensation to customers. More than 12m customers received payouts between April 2011 and November 2015, according to the National Audit Office.
The new PPI policy figures emerged from a freedom of information request made by Mark Davies, an adviser to a claims management company. He said the firm would call for a judicial review of how the regulator has handled the scandal.
He said the FCA’s handling of the scandal was “unlawful, detrimental to tens of millions of consumers, and contrary to FCA’s statutory objective of protecting consumers”. He said last week he handled a £16,000 compensation claim relating to a PPI policy sold alongside a storecard. Davies’ firm charges a 29% fee including VAT on any compensation awarded.
Martin Lewis, founder of MoneySavingExpert.com, branded the FCA’s deadline a mistake. He said that in more than half of all cases in the last 12 months where a PPI claim had been rejected by a bank but then taken to the independent ombudsman, the rejection is overturned.